E-commerce growth burdens logistics across Southeast Asia

October 13, 2020 | 18:34
The outstanding growth of e-commerce has set a great burden on the logistics sector in Southeast Asia, as reflected by the marked slowdown in the delivery speed of e-commerce companies.
e commerce growth burdens logistics across southeast asia
Logistics does not keep pace with the growth of e-commerce in Southeast Asia

A survey from iPrice Group – a Malaysia-based online shopping aggregator – revealed that over the social distancing in April and May, good delivery times increased by 52 per cent to 2.8 days per order, nearly one day more than before the pandemic.

Regarding the issue, Lai Chang, co-founder cum managing director of delivery company Ninja Van said that consumer demand for online shopping has skyrocketed, resulting in the rising number of parcels to be shipped. In April and May, traffic on Lazada, Shopee, and Zalora grew by 60 per cent.

Moreover, most packages are bulkier due to the shift from purchasing clothes to a large number of canned foods due to the need for food storage over the pandemic.

On the other hand, since COVID-19 broke out, the working hours of shippers have been cut to assure their safety, affecting consumers’ online shopping experience over the past time.

According to Parcel Monitor, also in April and May, complaints about lost goods increased significantly against the time before the health crisis.

A survey from Google and Temasek showed that the scale of e-commerce in Southeast Asia reached $38 billion last year, up 600 per cent within four years. The value is even forecast to extend to $150 billion in 2025.

Meanwhile, logistics in the region seems to be inferior. According to the World Bank, while developed countries only spend several per cent of their GDP on logistics, the figure in Southeast Asia is up to dozens of per cent, including Indonesia’s 24 per cent – the highest rate.

By Van Anh

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